Decarbonising our energy supply requires a fundamental rethink of our energy infrastructure and how we deliver power and fuel to the consumer. Accelerated renewables deployment is not possible without ensuring that these new production sites are connected to the power grid. Moving to greener fuels will also have consequences for our existing gas networks and fuel distribution. Finally, we need to ensure that our markets set the right signals to support the changes. Key recommendations: • Government to update Ofgem's remit to incorporate the Government's net zero target as set out in the 2008 Climate Change Act. • Government and Ofgem to work with network companies to facilitate anticipatory investments in grid infrastructure • Develop by 2025 a long-term cross-sectoral infrastructure strategy by 2025, to adapt and build respectively the distribution of liquid and gaseous fuels, electricity and CO2 networks over the next decade. • Deliver government's Review of Electricity Market Arrangements (REMA) as a priority to scale up electricity sector investment, unlock the benefits of renewables, reward flexibility and maintain security of supply • Commit to outlining a clear approach to gas vs. electricity 'rebalancing' by the end of 2023/4 (depending on the fossil fuel prices), and should make significant progress affecting relative prices by the end of 2024. |
188. Securing net zero is a key part of the energy infrastructure that underpins how we need to reimagine the energy transition - not as an additional phasing in of green and clean power, but as a fundamental overhaul of the existing network. The success of the National Grid in the 1960s, in bringing onstream more capacity than was needed at the time, now needs to be replicated with a similar 'National Net Zero Grid' mission or challenge. Just as National Grid led the way in establishing the UK as a global leader in how to deliver electricity at scale, we need to replicate this with the National Net Zero Grid. The National Net Zero Grid needs to demonstrate the ability - and above all agility - for renewable energy projects to secure a timely connection to the grid; for battery and other storage options such as hydrogen have access to that grid; and for the underpinning infrastructure requirements either at a transmission or at a distribution network operator level to be consistently and comprehensively operational without causing any further delays to decarbonisation. The Review has heard from multiple stakeholders, covering demand, flexibility, storage, and generation assets about the bottlenecks in grid connections, the constraints on the wider system and the limitations of current regulatory processes to build out networks at pace.
189. With costs for many renewable technologies coming down, the challenge is unlikely to be building new power capacity but how to integrate new, dispersed, intermittent renewable electricity generation to a grid designed for last century's needs. The problem extends beyond electricity to development of key infrastructure for fuels like hydrogen, where end use may vary into a wider system. Similarly, new technological hubs and clusters pose new challenges to our energy networks and distribution systems as well as markets, supply chains and skills.